XYZ Corporation, a multinational manufacturing company based in Country A, has been enjoying considerable success in its home market. With a successful product line and a strong reputation for quality, XYZ is exploring opportunities for international expansion to enhance its global presence. The company has identified Country B as a promising market due to its growing economy and increasing demand for XYZ's products.
As XYZ Corporation ventures into Country B, it encounters unexpected challenges related to local business practices that could be perceived as corruption. The local market in Country B is known for its complex regulatory environment and a history of business transactions involving facilitation payments, gift-giving, and preferential treatment to secure contracts. Salespeople are confronted with the following demands

  • Government officials in Country B suggest that expedited approvals and smoother market entry can be achieved through facilitation payments. These payments are common in the local business culture.
  • Local business partners and potential clients in Country B emphasize the importance of gift-giving as a way to build strong relationships. However, there is ambiguity around where the line between customary gift-giving and unethical bribery is drawn.
  • Key decision-makers in the industry express interest in XYZ Corporation providing preferential treatment or special considerations in exchange for lucrative contracts. These requests pose a dilemma for XYZ as they navigate the fine line between meeting business expectations and engaging in corrupt practices.

XYZ Corporation is committed to maintaining the highest ethical standards and complying with anti-corruption laws. However, the demands encountered in Country B present a significant dilemma for the company: on the one hand the business with Country B would ensures future business growth, but to engage in such practices could result in legal consequences and damage its global reputation.

Hint: Take on the assumption that XYZ is a German company listed on the German stock exchange. Use the brochure "Korruption vermeiden" (=Avoiding corruption) to develop solutions. (International students: Use DeepL to translate p. 7-9)